Creating value through investing in

high potential businesses

What we do

Percipient Capital is a leading provider of private equity and venture capital to small and medium sized businesses. Our focus is two-fold: helping entrepreneurs to grow their existing businesses and backing management teams to buy the businesses they run, but do not own.

We seek to support well established busineseses, with excellent management and which have a genuine potential to achieve a step change in earnings. We invest between £500,000 and £5,000,000 into each company we back.

Why Percipient?

Dealflow

Clients benefit from our strong proprietary dealflow, to which we apply our considerable experience and robust investment process to progress only the best opportunities. Investors always retain absolute discretion as to whether they wish to co-invest with us on any particular opportunity.

Track Record

Percipient is managed by a highly experienced investment team, with a long track record of investing in smaller companies. The team have been investing for over 15 years, having successfully led more than 50 transactions.

Alignment

We believe in aligning our interests to those of our clients. We also believe that the team should not get fat on annual management fees. Rather, we think that any reward should be earned by delivering strong performance to investors.

We also believe that we should back our judgement by investing our own personal monies into every single deal, on the same terms as investors.

Value Creation

Once an investment has completed, the hard work begins. We manage each investment on a full discretionary basis all the way through to exit. Our approach is one of working closely with the management teams we back to build shareholder value as an interested and supportive partner.

Focus

Our approach is only ever to make a handful of investments each year, ensuring that we are able to focus properly on every single investment we make.

Tax Efficient

Our approach is to only invest on the basis of a strong underlying investment case, never for tax reasons. However, we are typically able to combine our traditional private equity approach with the significant tax benefits and risk mitigation offered by the Enterprise Investment Scheme.

Our Investment Process

We consider each potential investment in depth and only once we believe that there is a robust business case will any opportunity be made available to investors

Origination and Active Assessment The team have been actively investing for more than 15 years and in that time have built strong relationships with a significant number of corporate finance advisors, accountants, lenders, investment banks, company directors and entrepreneurs. This gives Percipient a unique dealflow, much of which is proprietary to the team. We believe this to be a key asset.

Active Assessment We believe it is essential to get ‘under the skin’ of each business we back and get to know the management team well. This may involve multiple site visits, detailed questioning of the management and their advisers, together with research on the business, their competitors and the market.

Investment Structure We use our considerable skills and experience to structure each investment to achieve the right balance of risk and reward, making use of typical private equity structures – often overlaying the benefits of the EIS scheme. We also negotiate the full suite of investment and legal documentation on behalf of investors, typically including private equity style protections and consents to control and mitigate risk.

Investment Memorandum We understand that each investor has a different investment flavour and appetite to risk. Rather than forcing investors into a fixed portfolio, we prefer to let clients decide for themselves which businesses suit their tastes. This is done through issuing a detailed investment paper, which outlines the business, management team, business strategy and the key investment terms. The team are always available to answer any further questions investors may have.

Legal Documentation and Completion Where appropriate we also supplement our own detailed commercial investigations with formal third party financial, commercial and legal due diligence. Only once we are entirely comfortable with each aspect of the business and the formal legal documentation will we complete the investment. Once the investment has completed, we work closely with the management team to help build shareholder value, all the way through to exit. We provide regular reports to investors, detailing the progress with each company in their personal portfolio.

The team invest in every company personally, ensuring we are always fully aligned with our clients.

Frequently Asked Questions

Our investment service is only suitable for certain qualifying investors. Generally speaking, these are high net worth individuals, sophisticated or professional investors. Clients must also elect to be treated as an elective Professional Client under the FCA client classification rules.

Our client registration pack provides full details to help you decide whether our service might be appropriate for you.

Percipient will source appropriate investments and then apply its private equity skills and experience to investigate and assess each opportunity. Only once this is completed to our satisfaction will an opportunity be made available to investors.

Clients retain absolute discretion and make the final decision as to which opportunities they wish to invest in.

No, this is not a fund. Rather, each investor chooses the investments that suit their own tastes, preferences and requirements. We then manage that porfolio on a full discretionary basis on behalf of the investor, through to realisation.

Any capital realisations and income generated through the life of each investment are distributed to clients.

Once each transaction is completed, Percipient actively monitors and manages the investment on behalf of clients, working with the company to build shareholder value and exit the investment at the appropriate time.

Percipient exercises the rights accruing under the investment documentation on behalf of our investor group as a whole. This ensures that we can use our influence and institutional style investor protections to best effect to develop and protect shareholder value. It is not therefore possible to take account of the individual circumstances of a particular investor.

In order to fulfil our statutory obligations, we ask potential investors to complete a client registration form. This helps us to ensure that clients have sufficient business and/or financial experience to understand the risks involved in making the types of investments that we offer.

Once registered as a client, we are able to provide you with a detailed investment pack for each potential investment we are looking to complete. Clients are then free to decide which investments are of interest to them.

Investments are held by our nominee, ensuring that client assets are always fully segregated from those of Percipient in accordance with FCA rules. Clients always remain the beneficial owner and have a direct investment in the shares or securities of each company.

We provide clients with a written portfolio review document every six months, which contains a summary of the progress of each investment in their portfolio.

Seperately, we provide a holdings and transaction statement every six months, as at 5th April and October. Shortly after the end of each tax year we also provide a consolidated tax certificate, to assist clients with their tax returns.

Our approach is tailored to each company, but typically we seek to realise an investment during a period of 3 to 5 years from acquisition. We work with each company and use our discretion to try to exit at the optimum point for investors.

Many of our investments also attract a running yield, either by way of interest or dividends. The terms are detailed in the investment proposal document issued to clients to help them decide whether an investment suits their personal preferences.

Private equity investments are by their nature illiquid. The investment team will typically adopt a strategy of seeking to sell individual investments during a three to five year period from acquisition. However, in practise this may not be possible and consequently any investment may take longer, or indeed a shorter period, to realise.

Unusually, our investors do not pay any initial charges or annual management fees. Though, we may make a small charge to the investee companies to contribute towards the costs of making, managing and supporting the investments. Any such charges are always fully disclosed prior to investment.

Our principal return is through a profit share, typically 20%, on successful investments, i.e. once an individual investment has returned your original stake, further receipts are split 80%:20% between you and us.

We believe that the lack of annual management fees and our reliance on a long-term profit share is a bold statement. It is indicative of our confidence in our ability to generate returns and ensures that we are aligned with the interests of our clients.

The Enterprise Investment Scheme (EIS) is a government scheme designed to encourage investment into smaller companies. The scheme offers significant benefits to private investors, delivering the opportunity of a much reduced investment cost, tax free capital gains and substantial risk mitigation.

We only ever invest on the strength of the underlying investment case and never for tax reliefs. However, where possible, we seek to overlay the benefits the scheme can offer. Across a well managed portfolio, the benefits can be substantial.

Our investment service is open not just to individuals, but also corporate clients, family offices and investment firms. Our focus is firmly on the underlying investment case, rather than chasing tax reliefs. However, we do seek to offer clients the option of investing under EIS, where this is possible.

Sometimes we will provide more than one investment option as part of a transaction, for example EIS equity alongside a loan note. This can help investors to build a portfolio that closely matches their individual needs.

Following each investment, we work with the investee company to apply to HMRC for permission to issue investors with an EIS certificate. This enables investors to submit a claim for income tax relief and/or associated benefits from HMRC. This is usually done by entering the amount of your investment onto your annual tax return.

We already invest funds on behalf of various corporate clients, family offices and investment firms. Our investment-led, rather than tax-led, approach means that our service is equally suited to such clients.

Unfortunately, we are not able to provide individual tax advice, though we are always happy to help with general queries and can often point clients in the right direction to resolve their query.

As part of our investment structuring, we often use the services of a specialist tax advisory firm to help us optimise a transaction. Our investment papers provide an overview of our thinking in this regard, but investors should always ensure an investment suits their individual circumstances, taking professional advice where appropriate.

Co-invest with us

We would be delighted to talk with you further about our private equity investment service.